Corbyn’s benefits plan would ‘worsen poverty’

A RADICAL reform to the benefits system promoted by Labour leaders risks making poverty worse and triggering sweeping tax rises, an authoritative report has warned.

The findings are a blow to Jeremy Corbyn and John McDonnell who have raised the idea of a ‘basic income’ system which they say would leave no family at risk of poverty.

It would involve most meanstested state benefits being abolished and replaced with a taxpayer-funded handout paid to everyone. The Green Party included the proposal in its election manifesto.

The scathing analysis of the idea was carried out by economists at the Paris-based Organisation of Economic Cooperation and Development, which represents wealthy countries. It shredded claims that poverty would be defeated if everyone were paid by the state.

A basic income would simplify benefits and make sure everyone had some money, the report said.

But it warned: ‘An unconditional payment to everyone at meaningful but fiscally realistic levels would require tax rises as well as reductions in existing benefits, and would often not be an effective tool for reducing income poverty.’

If a basic income was introduced in Britain without major tax increases, the OECD said poverty rates ‘would increase significantly’. Last year Jeremy Corbyn said he was looking at the system as a ‘ possible answer’ to ‘provide more security for working households’.

‘It’s not an effective tool’